What is the difference between a payday loan broker and a payday loan lender?

There are a number of differences between a payday loan broker and a payday loan lender. The main one is that a broker will take your details and find a suitable loan for you. A lender is the company who actually loans you the money.

Here's what else you need to know:

Payday loan brokers

A payday loan broker provides a service, taking your details and searching for a payday loan that suits you, your circumstances and your credit rating. While on the positive side, the broker helps to find a loan from the lots of options available, a negative problem is that you generally need to agree to your information being used by lots of payday loan companies. This could mean you are inundated with calls and emails regarding a payday loan, or debt management companies.

Advantages of using a payday loan broker

  • A broker does all the hard work. You input your details and they go hunting for a suitable loan
  • A number of lenders may be offered giving you the choice of who to use

Disadvantages of using a payday loan broker

  • You generally need to agree to third party companies contacting you about loans and debt management options, which you may find annoying

Payday loan lenders

When brokers go searching for a loan, they contact payday loan lenders. Lenders are the companies that actually lend you the cash. Brokers do not lend you the money.

Advantages of using a payday loan lender directly

  • You control the companies that you work with and apply for a loan with
  • You aren't likely to be bombarded with calls and texts from other companies trying to offer you other loans

Disadvantages of using a payday loan lender directly

  • If a lender turns you down for a loan, you will need to go through the whole process of writing out your income and expenditure, etc. again with another lender, which may also be rejected
So whether you decided to work with a loan broker or go directly to a lender is completely up to you depending on your circumstances. You may feel that having a company do all the leg work to find a loan is easier, however, you may be put off by the calls and texts from third parties trying to offer you a loan. Applying for a loan directly with a lender is a great option, particularly if you have a relatively good credit rating as you may only need to apply to one lender to successfully receive your loan.